OTP Profit Rises to Record on Acquisitions, Fee

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OTP Profit Rises to Record on Acquisitions, Fee

OTP Bank Nyrt., the Hungarian lender that bought five eastern European banks last year, said third- quarter profit rose to a record on higher income from foreign units.

Net income advanced to 55.8 billion forint ($321 million), or 201 forint a share, from 53.6 billion forint, or 207 forint, a year earlier, the Budapest-based bank said today, cited by Bloomberg. That topped the 54.5 billion-forint median estimate of nine analysts surveyed.

OTP, a monopoly during the communist era, has spent more than $3 billion in six years buying banks from Bulgaria to Russia to reduce its dependence on Hungary, where government spending cuts have hurt consumer demand. It plans to start a ``new wave'' of acquisitions from 2008, Chief Executive Officer Sandor Csanyi said in May. The bank bought a second lender in Russia this week.

Profit growth of 4 percent at OTP, eastern Europe's largest bank by assets, is lagging behind the 21 percent increase in net income at PKO Bank Polski SA, the region's biggest by market value.

Net interest income, the difference between money paid out on deposits and earnings on loans, rose 26 percent to 106.9 billion forint, OTP said. Net fees and commissions rose to 38.5 billion forint from 28.6 billion forint a year earlier.

Loan volumes grew 5.9 percent from the second quarter to 5.3 trillion forint, with retail loans representing almost two-thirds of the total. Retail lending increased by 30 percent at OTP's Russian unit ISB and by 20 percent at the Montenegrin unit.

Shares of OTP have risen 3.4 percent this year compared with a 6.8 percent gain in Hungary's benchmark BUX Index, valuing the bank at $14.6 billion.

Unconsolidated nine-month net income at the bank was 114.6 billion forint, declining from 119.4 billion forint a year ago.

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